Alibaba News: Why Is BABA Stock Up Today?

  • Alibaba (BABA) stock is rallying after 60 new video games were approved by a Chinese regulator.
  • The news is seen as a sign that Beijing is easing its crackdown on the Chinese tech sector.
  • Other measures taken by the government have probably contributed to a strong rally in BABA stock this week.
BABA stock - Alibaba News: Why Is BABA Stock Up Today?

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Alibaba (NYSE:BABA) is trending strongly today after China’s government decided to allow 60 new video games to be marketed in the country. The news is seen as an indication that Beijing is becoming less antagonistic towards the country’s tech sector and BABA stock.

Over the last 18 months, the company has been one of many Chinese tech names undermined by measures taken by the country’s government. Now, in early trading, BABA stock was rallying 7% amid much heavier-than-usual trading volume.

New Video Game Approvals Boost BABA Stock

China’s National Press and Public Administration yesterday named 60 new video games that it had certified for “publishing” in China. Beijing had approved a separate group of games in April. Before then, however, no video games had been licensed for almost eight months, according to Reuters.

In the latest group of games that was approved, no titles from China’s two  most prolific video-game makers — Tencent (OTCMKTS:TCEHY) and NetEase (NASDAQ:NTES) — were licensed.

Since the market closed last Friday, BABA stock has climbed almost 20%.

Pro-Tech Measures and Stimulus Efforts

On May 17, a leading Chinese official spoke with a group of “the country’s top technology executives” and promised to back the nation’s tech sector. One of the country’s leading government councils, the Politburo, made similar vows in April.

Meanwhile, many Chinese stocks have also been boosted this week by an easing of coronavirus mitigation measures in the country. For example, on Monday, Beijing allowed its restaurants to resume serving customers indoors and eliminated driving bans in a majority of the city.

On May 31, the Chinese government indicated that it would implement 33 new steps in an effort to boost companies hurt by the coronavirus outbreak.

Despite its recent, huge rally, BABA stock has still fallen 5% so far in 2022 and nearly 50% over the last 12 months.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.


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